Challenges Facing a Second Green Revolution—
Expanding the Reach of Organic Agriculture
Thomas L. Dobbs
Professor of Agricultural Economics
South Dakota State University
Brookings, SD
Presentation at
USDA Workshop on Organic Agriculture:
Innovations in Organic Marketing, Technology, and Research
Washington, DC
October 6-7, 2005
The word “revolution” has been greatly abused, but no other term
adequately describes the effects of the new seeds on the poor countries
where they are being used. The technological breakthrough achieved by
agricultural scientists foreshadows widespread changes in the economic,
social, and political orders of the poor countries. [Lester Brown (1970, p.
6), describing the “Green Revolution” in developing countries, in his book
Seeds of Change: The Green Revolution and Development in the 1970’s]
The future for organic farming is uncertain. Much depends on the
availability and price of fertilizer (especially nitrogen) and farm labor,
produce-price relationships, the domestic and world demand for food,
concern for soil and water conservation, concern for health and the
environment, and U.S. policies toward the development and promotion of
organic farming practices. Due to one or more of the above factors, it may
be economical for some farmers to produce certain crops and livestock
organically rather than conventionally. [From the USDA’s classic Report
and Recommendations on Organic Farming (USDA Study Team on
Organic Farming, 1980, p. 46)]
This workshop on organic agriculture has historic timeliness, especially for those of
us old enough to have observed or participated in the 1960s/1970s “Green Revolution” in
many developing countries. As Lester Brown explained in Seeds of Change: The Green
Revolution and Development in the 1970s (1970), US government policy emphasis shifted
in 1965, exactly 40 years ago, from direct food aid for developing countries to more active
assistance to these countries in developing their own food production capacities. At the
time, Brown was a senior US Department of Agriculture (USDA) official dealing with
international agriculture policies. Also at about the same time, governments of several
Draft Session Paper – Organic Agriculture Workshop, USDA, ERS, October 6-7, 2005
Final Papers to be Published by Crop Management, Summer, 2006
major developing countries such as India and the Phillipines began to place much more
emphasis on aggressive, coordinated programs to boost food production. The result was
dramatic increases in cereal production between the late-1960s and the mid-1970s in many
parts of the developing world, especially in regions well endowed with rainfall or irrigation
water. The dramatic increases were the result of rapid farmer adoption of “packages” of
inputs consisting of high-yielding seed varieties (especially wheat and rice), inorganic
fertilizer, and, in many areas, irrigation from groundwater. The dramatic changes in
farming practices and in cereal output per hectare soon became known as the “Green
Revolution”. I witnessed the unfolding of this agricultural revolution on the Gangetic Plain
of north India while conducting research there in 1967/68 for my doctoral dissertation.
The groundwork for this Green Revolution in developing country agricultures had
been laid much earlier, of course. The basic technologies and practices had been evolving
for some time in Europe and North America—to some extent since about the 1930s, and
especially following World War II. I have described elsewhere the specialization and
intensification “evolution” in United Kingdom (UK) and US agricultures (Dobbs, 2001). i
More specific groundwork for the developing countries Green Revolution, however, can be
traced to plant breeding work supported by the Rockefeller and Ford Foundations in
Mexico and the Phillipines. This work was critical to development of short-stemmed wheat
and rice varieties, adapted to developing country climates, that could utilize high
applications of water and nitrogen fertilizer without lodging.
The year 1980 also is of historic significance for this workshop. In that year,
exactly 25 years ago and only 10 years after the publication of Brown’s Seeds of Change
book, the USDA released its Report and Recommendations on Organic Farming.
Although USDA scientists had shown interest in organic agriculture in earlier eras—most
notably F.H. King (1911), in writing about agriculture in east Asia—the 1980 report
signaled a recognition that there might still be some role for organic farming systems in the
intensification, high-yield era that had evolved since World War II. Like the Green
Revolution described above, the intellectual and political groundwork that made the USDA
study team’s work and report possible had been laid by numerous individuals and
organizations. In the US, the work of J.I. and Robert Rodale and the publication of Rachel
Carson’s Silent Spring (1962) were of special significance. Prior to that, the contributions
of England’s Sir Albert Howard, author of An Agricultural Testament (1943), and Lady
Eve Balfour, founder of Britain’s Soil Association, were of enormous importance.
(Mergentime, 1994) Later, the formation of California Certified Organic Farmers (CCOF)
in 1973 (Lipson, 1998) helped give visibility and credibility to the emerging US organic
farming movement.
The release of the 1980 USDA report may have been politically bold at the time,
but the report itself was written—and appropriately so—with careful scientific
qualifications. The report helped open the door for renewed scientific investigation of
organic agriculture in the USDA/Land Grant University complex. Although organic
research today still makes up only a small fraction of publicly funded agricultural research
in the US, organic agriculture research has much greater visibility and perceived credibility
than it did 25 years ago. Unlike in Western Europe, however, US public policies, for the
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most part, do not encourage actively expansion of organic farming. There are no national
goals or strategies in the US to encourage growth in organic farming and food
consumption.
To set the stage for this workshop, I intend to outline some challenges this country
would face if policy makers were to decide to follow Europe’s path in attempting to launch
a second “Green Revolution” based on organic agriculture. Ironically, the same “green”
terminology that previously symbolized high-yield cropping based on synthetic chemical
inputs has already been used for some time now, both in Europe and the US, to
characterize more environment-friendly agriculture based on organic and other
ecologically-based farming systems. It is appropriate, then, to identify lessons that might
be drawn from the first “Green Revolution”.
Framework for developing Green Revolution strategies
Let’s go back again to the mid-1960s when, as indicated above, US government
policy began to place much greater emphasis on food production within developing
countries. In 1966, a non-profit agency called the Agricultural Development Council
produced a little booklet by Arthur Mosher (1966) entitled Getting Agriculture Moving:
Essentials for Development and Modernization. Mosher discussed five “essentials” for
“agricultural development” in his booklet:
1.
2.
3.
4.
5.
Markets for farm products
Constantly changing technology
Local availability of supplies and equipment
Production incentives for farmersii
Transportation
In addition, he listed five potential “accelerators” of agricultural development:
1.
2.
3.
4.
5.
Education for development
Production credit
Group action by farmers
Improving and expanding agricultural land
National planning for agricultural development
Interestingly, Leslie Duram’s list of “influences” on organic farming in her recent
book has many similarities to Mosher’s lists. Duram (2005, p. 151) lists the following four
broad categories of influences on decisions of organic farmers:
1.
2.
3.
4.
Economic (markets, organic food prices, etc.)
Ecology (balance, soil health, etc.)
Society (American culture, policies/information)
Personal (independence, innovation, tradition)
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The similarities between these lists, separated in time by nearly 40 years, should
not be surprising. Agricultural adoption and diffusion theories received a great deal of
attention during the years leading up to the first Green Revolution, and social scientists
have continued to adapt, refine, and apply the theories and concepts from that period to
new situations. In my own recent work with Jules Pretty on agri-environmental policies
(Dobbs and Pretty, 2001 and 2005), we have utilized a conceptual framework that focuses
on the following three important goals of farmers:iii
1. To have adequate net income (profits)
2. To keep risk within manageable proportions
3. To achieve good stewardship of natural resources
The framework is focused on how agri-environmental policies, including policies for
organic agriculture, influence farmers’ incentives to move from “conventional” to more
ecologically sustainable farming systems by effects on their abilities to achieve these goals.
The following “contextual factors” can either enhance or inhibit the effectiveness of
policies in moving farmers to more ecologically sustainable farming systems:
1.
2.
3.
4.
Prices and access to markets
Technologies
The structure of agriculture
Social and human capital
Drawing on these various conceptual frameworks—from those of the first Green
Revolution period, represented by that of Mosher, to ones of more recent vintage,
including Durum’s and Dobbs and Pretty’s—I will focus on challenges facing a second
Green Revolution based on organic agriculture by considering three sets of influences:
1. Technology, prices, and markets
2. The structure of agriculture
3. Public policies
Research, education, and planning leading to the first Green Revolution gave a great deal
of attention to #1 and #3. The “institutionalists” also paid attention to #2, but the structure
of agriculture received even more attention as the Green Revolution matured. While preGreen Revolution attention of institutionalists was on the necessary structural conditions
for agricultural development, post-Green Revolution attention turned to issues of equity,
especially with regard to impacts on the poorest members of society, including landless
laborers. Drawing on the first Green Revolution experience, I will consider the "structure
of agriculture” from both cause and effect standpoints. Post-Green Revolution analysis
also focused much greater attention on “appropriate technology”, which I address briefly in
the following section of this paper.
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Influences of technology, prices, and markets on farm profits and risk
Technologies, consumer demand, and markets together strongly influence the
profitability and risks for farmers in changing from more conventional farming systems to
organic systems. Therefore, central to any strategy for expanding organic agriculture is the
challenge of developing appropriate technology and marketing institutions.
Klonsky and Greene (2005) recently described the trends in US organic food
consumption. They presented a picture of rapidly expanding consumption—annual rates of
growth averaging 20 percent since 1997—based, to a substantial extent, on consumers’
health and food safety concerns. Organic food sales reached $10.4 billion in 2003, about 2
percent of total US food sales. They suggest that the US organic food market could realize
continued expansion by:
1) increasing the number of retail outlets with respect to type and number,
2)increasing the number of organic products available in each outlet type,
3) entry of mainstream food manufacturers into organic, 4) branding of
organic, and 5) increased export. (Klonsky and Greene, 2005, p. 4)
Streff and Dobbs (2004) have documented relatively high price premiums for
organic grains and soybeans during some periods between 1995 and 2003, as has the
USDA’s Economic Research Service (Dimitri and Oberholtzer, 2005b) for some organic
vegetables in recent years. However, there remain many challenges in expanding
processing and retail outlets for organic farm products and strengthening the marketing
linkages from farmers all the way to consumers (Dobbs, Shane, and Feuz, 2000; Dimitri
and Greene, 2002). Research cited by Dimitri and Oberholtzer (2005a) indicates that price
is the leading barrier to greater organic purchases by consumers. Organic price premiums
at the retail level are due to many factors in addition to sometimes higher production costs
at the farm level, including higher transaction costs associated with dispersed and
relatively small production levels (Dimitri and Oberholtzer, 2005a, p. 8).
Reviews of U.S. comparative profitability studies indicate that price premiums at
the farm level are necessary for some organic systems to be competitive with their
conventional counterparts. This is especially true for crops like processed tomatoes and
cotton. However, some organic systems have been shown to be competitive even without
price premiums at least some of the time. This is the case for organic systems featuring
corn and soybeans in some Midwest areas. (Klonsky and Greene, 2005; Welsh, 1999)
Recently reported research in Iowa indicated that an organic corn/soybeans/oats/alfalfa
rotation could be more profitable than a conventional corn/soybean rotation even without
price premiums, but the organic system was less profitable when a charge for purchasing
compost was included in the organic budgets (Delate, et al., 2003). In a similar study in
Minnesota, the 4-year organic rotation consisting of corn, soybeans, oats, and alfalfa had
higher average net returns over the period 1990 through 1999 than conventional
corn/soybean rotations when organic price premiums were included. When organic price
premiums were excluded, the organic system still had higher average net returns, but the
differences were not statistically significant (Mahoney, et al., 2004). Recently reported
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comparisons of organic and conventional small grain/oilseed crop systems in Alberta,
Canada found the organic systems to be less profitable, on average, than the most
profitable conventional system (continuous wheat) when organic premiums were not
included. When the “most likely” organic price premiums were included, however, one of
the organic systems had net returns that were similar, on average, to the most profitable
conventional system (Smith, Clapperton, and Blackshaw, 2004).
Given the fact that organic price premiums do exist for many crop and animal
products, why does organic agriculture remain such a small proportion of U.S. agriculture?
Although certified organic cropland in the US increased by 53 percent between 1997 and
2001, it was still only 0.36 percent of total US cropland. Certified organic pasture and
rangeland was only 0.23 percent of the total in 2001, in spite of more than doubling since
1997 (Greene and Kremen, 2003). Some clues to answering the question about why there
is not more organic production in the US may be found in the most recent (2002) organic
farmer survey by the Organic Farming Research Foundation (OFRF) (Walz, 2004).
Farmers responding to that survey ranked the following (in order) as their top eight
production, marketing, or regulatory problems:
1.
2.
3.
4.
5.
6.
7.
8.
Weather-related production costs
Organic certification costs
Obtaining organic price premiums
High input costs
Lack of organic marketing networks
High labor costs
Weed-related production losses
Production losses due to pests or diseases
Four of these eight problems (#1, #3, #7, and #8) involve some aspect of risk.
Organic farming systems are not inherently more risky in all respects than conventional
systems. In fact, organic systems tend to be more drought tolerant, and organic farms have
a larger mix of crops (and often of livestock) than do conventional farms. Both of these
features tend to make the economics of organic farms less risky than conventional farms.
To gain greater insight on risks associated with organic farming, Hansen, et al. (2004)
solicited organic farmers’ views in a series of focus groups during 2001 and 2002. Among
the risks identified in this study that are of special concern to organic farmers are: (1) risks
of contamination of organic crops by genetically modified organisms (GMOs); (2)
shortages of particular inputs such as certified organic seeds and biological pesticides; (3)
access to capital, because banks are sometimes unfamiliar with organic production
systems; (4) instability of organic price premiums; and (5) some crops in organic rotations
do not benefit from USDA commodity program price and income protection. The study
was used in part to identify ways that Federal risk management programs (e.g., crop
insurance) might better serve organic farmers.
The OFRF 2002 organic farmer survey also included a place for respondents to
give open-ended responses to a question about marketing conditions that have the greatest
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negative impact on organic farming economic sustainability and profitability. The most
common responses were these:
1.
2.
3.
4.
5.
6.
Competition with large-scale producers
Competition with organic imports
Low prices
Buyer consolidation in organic market place
Finding buyers and markets
Market overproduction (in soybeans, especially; also apples and raisins)
These responses suggest that, though organic markets have been rapidly expanding at the
retail level, expansions in supply and demand do not always move smoothly together,
thereby sometimes resulting in price declines at the farm level. Also, farmers are
concerned about the changing structure of the organic industry (Sligh and Christman,
2003), which I address in the next section of this paper.
Continued expansions in demand and reductions in transactions costs throughout
the marketing chain can help enable price signals to be effective in encouraging continued
growth in organic production at the farm level. What is the role, then, of technology in
facilitating further growth in organic production? After all, it was new technology
packages that triggered the first Green Revolution. It is highly unlikely that we will see
technology breakthroughs for organic systems that could have the dramatic effect that the
high-yielding grain varieties had in the first Green Revolution. Some lessons about
technology can be drawn from that previous Green Revolution experience, however.
One lesson is that there were long, sustained plant breeding efforts that led to the
varietal breakthroughs. A second lesson is that agricultural development professionals took
a systems approach in attempting to encourage adoption of the new varieties. In India, for
example, there was an integrated agricultural development strategy that targeted Districts
with high production potential. The integrated approach attempted to see that all the key
ingredients—seeds, fertilizer, irrigation water, and information—were in place to
encourage rapid and high rates of adoption. When all the key ingredients were in place, the
result was, indeed, rapid adoption of the Green Revolution technology packages.
The first Green Revolution experience does not imply that plant breeding should
necessarily lead the way for a second Green Revolution based on organic agriculture.
However, the previous experience does suggest that research and education on organic
technologies should continue to have a heavy systems orientation and should focus on
technology packages. In fact, organic agriculture research and education have been known
for their systems approaches. I am concerned, however, that as organic research programs
mature and garner their own sources of funding, there is a very real danger that the
research will look more and more like that of conventional agriculture. Although projects
may continue to have systems and multidiscipline appearances, the appearances may
simply mask the same old kinds of highly specialized research on small technological
refinements. While there is an important place for disciplinary and reductionist research in
organic agriculture, we need to be wary of researching-to-death particular technologies.
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A key concept that arose in the 1970s out of some of the unintended consequences
of the first Green Revolution was that of “appropriate technology”.iv Some of the of the
post-Green Revolution concerns about the “successful” technologies was that they were
not always appropriate for poor farmers in marginal, dryland (rainfed) areas and that they
generally led to great losses in biodiversity. While almost everyone agrees that
economically successful organic systems are specific to agro-climatic regions and resource
conditions, there is a tendency among some organic researchers to feel that the main
challenge in each region is to adapt the “conventional” crops and livestock of that region to
organic farming methods. Instead, we should back up and ask whether the crops and
livestock that have evolved over time due to specialization and the use of chemical inputs
really are appropriate to that region. Maybe there is no “natural” comparative advantage
for some crops or livestock species in a particular region. An “appropriate technology”
approach would focus on technologies and systems for crops and livestock that are
ecologically “appropriate” for the climate and resources of each region.
The structure of agriculture
As noted in the “framework” section of this paper, the structure of agriculture is an
important consideration from both cause and effect standpoints in strategies for expanding
the reach of organic agriculture. At least in Great Plains and Midwest agriculture, the
evolving structure of agriculture appears to inhibit expansion of ecologically diverse
farming systems, including organic systems (e.g., see Dumke and Dobbs, 1999). Organic
and other ecologically diverse farming systems require a great deal of management
attention to both production and marketing. They also generally require more labor in the
production process than do conventional systems. Historically, moderate-sized, full-time
farms that also had several family members available to assist with farming operations
were best able to supply the requisite management and labor for diverse operations. As we
all know, US farm structure for several decades now has been evolving into an
increasingly bi-modal structure—with very large farms on one end and smaller, part-time
farms on the other. Both of these farm types lend themselves best to specialization in just a
few crop or livestock operations. With smaller families and usually either wife or husband
(or both) working off the farm, this structure lends itself best to capital-intensive, rather
than labor-intensive, farming systems.
Given this current structure of agriculture, it is sometimes difficult to be optimistic
about the prospects for a major expansion in US land area covered by organic farming
systems. One might envision some major expansion in organic farm numbers, based on
small-hectareage operations near major urban markets that produce fruits, vegetables, and
specialized livestock or other value-added products. From the standpoint of producing
organic food for urban consumers, this kind of expansion would be regarded as a very
positive thing by most organic agriculture proponents. However, from the standpoint of
impact on the environment and ecology of US agriculture, the effect might be very limited
because it could leave the vast majority of US agricultural hectareage in chemical-intensive
conventional farming.
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This brings us to the question of whether large-scale—what some might refer to as
“industrial organic”—farms can fulfill the goals of organic agriculture. By definition,
large-scale organic farms would not fulfill the “Jeffersonian” or “agrarian” small family
farm goals that have characterized much of the early organic movement in Midwest and
Great Plains agriculture. We need to bear in mind, however, that this “Jeffersonian” ideal
has not traditionally been central to all of US agriculture. California, for example, “never
had an agrarian tradition”, according to Guthman (2004, p. 174; the italics appear in the
original). Guthman argues that in the far West, “the central struggle has always been
between industrial producers and wage labor” (also p. 174), not between large growers and
small growers. Hence, adopting the Midwest’s large farm/small farm agrarian rhetoric in
California implies, in Guthman’s view, that organic agriculture could or should save a type
of family farming tradition that actually never existed to any substantial extent in much of
California agriculture.
Guthman’s observations also are relevant to areas other than California, however. If
organic agriculture is going to have social goals, the goals should go beyond some
idealized vision of a family farm. Concern about agricultural laborers should take on much
greater importance. Many agricultural laborers (beyond those who are part of the farm
family) also are involved in organic agriculture in the Midwest, even where organic
agriculture still comes close to the “Jeffersonian” ideal. They are involved not only in
production—especially in hand weeding in the case of grain/oilseed crop farms—but also
in processing. Seldom if ever do organic and sustainable agriculture forums in the Midwest
feature sessions on the sources of labor or wages and working conditions of these field
laborers and laborers needed to slaughter organic chickens, hogs, or cattle. The organic
farming movement is on very weak footing when it asks for consumer and public support
on “social” grounds when almost the only social focus is that of the farm operator family.v
Aside from social goals, then, can “industrial organic” satisfy the environmental
and ecological goals inherent in the organic agriculture movement? If we take the Federal
rules for organic certification as necessary conditions for satisfying environmental and
ecological goals, than the answer might be yes—for those large-scale operations that can
achieve certification. But, as we can all observe, these rules continue to be challenged and
debated. There is great pressure to have rules that industrial organic can live with,
particularly for animal agriculture. Depending on where lines are drawn in many of these
rule disputes, large-scale organic farming operations may or may not be able to achieve
and maintain certification.
The first Green Revolution had one overriding goal—to satisfy extremely pressing
food needs of large and rapidly growing populations in developing countries. Other social
goals and environmental goals were not central to the strategies of most countries leading
up to that revolution, but such goals have taken on much greater importance in the
revolution’s aftermath, as unintended consequences have become more apparent. The
original, and still primary, driving goals of the organic movement are environmental or
ecological. In addition, food safety and nutrition goals are now taking on greater
importance. However, the place and nature of social goals related to the “structure of
agriculture” constitute an outstanding issue in the US organic agriculture movement.
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Public policies
I noted earlier in this paper that public policies played an important role in the first
Green Revolution. After the first waves of success in agricultural areas that were especially
well-suited to the Green Revolution technology packages, economic policy took on even
greater importance as developing country governments and donor agencies such as the US
Agency for International Development tried to increase agricultural production in other
areas. In a sense—though we are yet to see a comparable Green Revolution in the US
based on organic agriculture—the situation today with respect to adoption of organic
farming systems is somewhat like the mid-1970s regarding adoption of the first Green
Revolution technology packages. By the mid-1970s, many farmers in areas of the
developing world where the Green Revolution packages were profitable and not too risky
had adopted them. It was then clear that much greater attention to a range of policy factors
was needed in order to increase food production in other areas. Today, 25 years after
release of the USDA’s Report and Recommendations on Organic Farming, it is abundantly
clear that much greater attention to public policies is needed if there is to be a major
expansion of organic hectareage in the US. There has already been more than a decade of
such policy attention to organic agriculture in Western Europe (Dabbert, Haring, and
Zanoli, 2004).
Several decades of agricultural price and income support policies in the European
Union (EU) and the US that “coupled” support, either directly or indirectly, to crop and
livestock production had the effect of favoring chemical-intensive systems over organic
and other ecologically-based systems (Dobbs and Pretty, 2004; Offermann, 2003). US
agricultural policy took important steps toward “decoupling” supports from current
production in the 1996 Federal farm bill, and then, in effect, took some backward steps in
the 2002 farm bill. Like the US, the EU began the decoupling process in the 1990s.
However, unlike in the US, the latest major agricultural policy changes in the EU’s
Common Agricultural Policy (CAP)—approved in 2003 and now in the process of being
implemented in EU member states—appear to constitute a significant step toward even
greater decoupling (Dobbs and Pretty, 2005). These latest CAP reforms should help greatly
to further “leveling of the playing field” for organic agriculture in Europe.
EU member states also have many agri-environmental policies, some of which
aggressively support organic agriculture (Dabbert, Haring, and Zanoli, 2004). There is
growing documentation of the negative environmental externalities of “conventional
agriculture” in Europe and the US (e.g., Pretty et al., 2000 and 2001; Tegtmeier and Duffy,
2004). That research and an emerging body of literature indicating that organic agriculture
performs better in at least some environmental and energy use respects than conventional
agriculture (Dabbert, Haring, and Zanoli, 2004; Jones, 2003; Pimentel, et al., 2005)
provide bases for pubic policies that go beyond simply leveling the playing field for
organic agriculture. There is not as much evidence in support of the argument that organic
farming also provides a significant boost for rural economic development. However, to the
extent organic farming is tied to local food systems, local value-added products, and a
positive image of rural areas, it may play at least some positive role in rural development
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(Cierpka and Geier, 2003; Dabbert, Haring, and Zanoli, 2004; Duram, 2005). If that
additional dimension of organic agriculture’s “multifunctionality” is present, there is
further rationale for public policies actively supporting organic agriculture.
At present, there is only very limited policy support for organic agriculture in the
US. There is very modest but growing support for organic agriculture research, and there is
a program that provides some cost-share funds for organic certification. The Federal crop
insurance program has been revised to somewhat better accommodate organic farmers. The
Environmental Quality Incentives Program (EQIP) has been used in some States as an
organic transition assistance program somewhat like transition assistance programs in the
EU. However, all of these programs are extremely modest in comparison to agrienvironmental programs focused on organic agriculture in Europe.
There was some hope that the Conservation Security Program (CSP), newly created
in the 2002 US Federal farm bill, might serve in part as an organic incentive payment
program like ones in Europe (Lohr, 2001). At South Dakota State University, we recently
analyzed potential for the CSP to induce adoption of more ecologically diverse crop
rotations, including organic crop rotation systems, in the US’s Western Corn Belt (Dobbs
and Streff, 2005). At the time our analysis was conducted, implementation rules for the
CSP had not been finalized and no CSP signup had yet been approved for South Dakota,
where our case study region was located. Therefore, it was necessary to make a number of
assumptions about qualifying practices and payment rates. We assumed that organic crop
rotations would qualify for payments in Tier 3, the highest of the CSP’s three payment
tiers. Results for just a few of the crop system comparisons in this study are shown in
Figure 1. Shown there are net return comparisons for a baseline corn/soybean system, two
crop systems that are not organic but are more ecologically diverse than the corn/soybean
system, and an organic system. The organic system consists of a 5-year crop rotation that
includes corn, soybeans, oats as a nurse crop for alfalfa, and two subsequent years of
harvested alfalfa. Net returns are shown for each system (a) with no Federal farm program
payments of any kind included; (b) with “commodity” program price and income support
payments included; and (c) with both “commodity” and assumed CSP payments included.
Net returns for the organic system are shown both “with” and “without” price premiums
included.vi
We can see in this figure that the baseline corn/soybean system—reflecting
common agronomic practices in the study region—has negative net returns when land and
all labor costs are included and Federal farm program payments are excluded. Federal
“commodity” program payments of $39/acre bring this system to just about a breakeven
situation. The two ecologically diverse but not organic systems have slightly positive net
returns even without Federal payments, and the organic system has slightly negative net
returns if Federal payments and organic price premiums are not included. The ecologically
diverse and organic (without price premium) rotations have net returns ranging from
$33/acre (organic system) to $47/acre when Federal payments (other than CSP payments)
are included. When organic price premiums are included, the organic system has by far the
highest net returns ($102/acre, including Federal commodity program payments). We
assumed that the baseline corn/soybean system would receive no CSP payments, that the
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ecologically diverse but not organic systems would qualify for payments in Tier 2, and that
the organic system would qualify for Tier 3 payments. The assumed CSP payments for the
two ecologically diverse but not organic systems were approximately $14 and $16/acre,
respectively, and the assumed payment for the organic system was approximately $19/acre.
With those levels of CSP payment included, in addition to the Federal commodity program
payments, the organic system “without” price premiums has roughly the same net return
per acre as the less profitable of the two non-organic but ecologically diverse systems.
Briefly stated, these results suggest that both organic and non-organic systems that
are ecologically diverse may be more profitable than conventional corn-soybean systems in
the southeastern South Dakota study region—with or without Federal commodity
payments, CSP payments, or price premiums for the organic system. If that is actually the
case, are CSP or other agri-environmental program payments really needed to encourage
adoption of organic systems? The results would seem to imply “no”, if the decision is
simply whether to continue with a conventional corn/soybean system or to go organic. If
the choice is between ecologically diverse systems that are not organic and ones that are
organic, the answer might be “yes”, if farmers are not confident of the level and continuity
of organic price premiums. However, neither organic nor non-organic ecologically diverse
systems are very common in the study region. This suggests that some of the risk and other
factors discussed earlier in this paper are holding back the adoption of organic and other
ecologically diverse farming systems. If that is the case, CSP or other incentive payments
may be critical to any major expansion of organic hectareage, at least for so long as
Federal farm program commodity-type payments continue to be so important to the net
returns and associated land values of conventional agriculture.
Challenges for this workshop
I have tried to raise some issues and challenges facing organic agriculture in the
US. I expect that the presenters and panelists in this workshop will go into greater detail on
many of the issues, and that they will present other challenges, as well. I look forward to
the speakers in Sessions 2, 3, 5, and 7 presenting us with challenges and recommendations
for making organic agriculture more attractive to farmers. I expect that some of the
speakers in those sessions also will elaborate on some of the organic industry “structure”
issues that I have touched on. Panelists in Session 4 and speakers in Session 6 will provide
us with greater insights on the current and future policy environment for organic
agriculture in the US. “Measuring and communicating the benefits of organic food
production”, the topic of Session 6, is critical to establishment of a political base for more
active public support of organic agriculture. The panelists in Session 4 (“strategies to
facilitate organic sector development”) are extremely well qualified to provide stimulating
thoughts on whether and how public policies might be used to more actively support
organic agriculture in the US.
Over the next two days, as we identify and elaborate the technology, market,
research, policy, and other components of a possible second Green Revolution, this one
based on organic farming methods, I hope that we keep in mind some experiences and
possible lessons of the previous Green Revolution based on chemical-intensive farming
Draft Session Paper – Organic Agriculture Workshop, USDA, ERS, October 6-7, 2005
Final Papers to be Published by Crop Management, Summer, 2006
12
methods. Though many proponents of organic agriculture are quite critical of some aspects
of that previous Green Revolution, there are lessons about strategies that we can draw from
that experience as we lay groundwork for the next agricultural revolution.
Draft Session Paper – Organic Agriculture Workshop, USDA, ERS, October 6-7, 2005
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13
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i
Also see Dumke and Dobbs (1999) for a description and analysis of this evolution in a region of the US Western
Cornbelt.
ii
In my Ph.D. dissertation on some aspects of the Green Revolution in northern India, I focused on items #3 and #4
in this list, analyzing the following “incentive factors”: (1) size and fragmentation of holdings; (2) tenure and
tenancy institutions; (3) investment returns; (4) risk; (5) availability of inputs; and (6) status and recognition (Dobbs,
1969; Dobbs and Foster, 1972).
iii
Farmers have other goals, also, of course, but these three are considered especially important from a policy
standpoint.
iv
This is closely related to the term “intermediate technology” that Schumacher used in his famous Small is
Beautiful book (1973).
v
I am not including food nutrition and safety goals and environmental goals under the “social” heading here. Those
are important organic agriculture goals, but I am simply not placing them under the “social” heading.
vi
See Dobbs and Streff (2005) for more details about the rotations compared, data sources, “commodity” and CSP
payment assumptions, and results.
Draft Session Paper – Organic Agriculture Workshop, USDA, ERS, October 6-7, 2005
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